Question: The manager at Michael's Furniture Store is trying to figure out how much to charge for a couch that just arrived. If the couch was bought at a wholesale price of $112.00 and Michael's Furniture Store marks up all furniture by 45%, at what price should the manager sell the couch?
Solution: In order to find the retail price, we must first find the amount of markup. Remember that a markup rate is a percentage of the wholesale price that a store adds to get a selling or retail price. With this knowledge, we can figure out the following equation: markup rate $\times$ wholesale price $=$ amount of markup Since the markup rate is a percentage, we have to convert it into a decimal first. Percent means "out of one hundred," so $45\%$ is equivalent to $\frac{45}{100}$ which is also equal to $45 \div 100$ $45 \div 100 = 0.45$ Now you have all the information you need to find the amount of markup! $0.45$ $\times$ $$112.00$ $=$ $$50.40$ Since the markup rate is a percentage of the wholesale price that is added to get the retail price, we can find the retail price with the following equation: amount of markup $+$ wholesale price $=$ retail price $$50.40$ $+$ $$112.00$ $=$ $$162.40$ The retail price of the couch should be $$162.40$.